What did the SSA do to secure your retirement?

The Social Security Administration (SSA) is a government agency that is responsible for handling social security benefits for retired individuals, as well as SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income) for those who qualify. The SSA was created by President Franklin D. Roosevelt in 1935 and has since then made many changes to secure the retirement of individuals from a financial perspective, ensuring that they have enough savings to cover their expenses in their senior years.

What is the Social Security Benefit?

The Social Security benefit is a monthly payment provided by the SSA to those who have contributed to the Social Security program through taxes. The amount an individual receives is based on their earnings history, and the retirement age they have chosen. The SSA adjusts these benefits annually based on the increase in cost of living.

The Social Security benefit equation

The SSA determines the benefit amount based on three key factors:

  • The worker’s earnings history.
  • The age at which the person starts receiving benefits.
  • The worker’s lifetime earnings.

The income threshold

Once an individual starts earning income, there is a threshold amount over which Social Security benefits will be reduced. Any income over this amount will cause a decrease in the individual’s benefit payments.

How has the SSA secured your retirement?

1. Creating tax-funded social security programs

The SSA has provided Americans with the ability to save for retirement through tax-funded social security programs. The social security tax is a key component of the program and funds senior benefits, disability benefits and survivor benefits.

2. Enabling you to receive retirement income early

The SSA has allowed individuals to receive their retirement income early, at a reduced monthly payment.

3. Offering survivor benefits

Another way the SSA has secured retirement is by offering survivor benefits. The program pays monthly benefits to widows or widowers of late spouses who contributed to Social Security. The program pays these benefits to help the survivors manage the cost of living.

4. Providing disability benefits

The SSA also provides disability benefits to those who become handicapped before they have reached their full retirement age. They are paid monthly until the individual reaches minimum retirement age before they are transferred to senior benefits.

5. Adjusting benefits annually

The SSA also increases benefits annually to help account for inflation based on the consumer price index. This adjustment helps to ensure that senior isn’t left behind as price increases across most things like medicine, housing, transportation, and more.

6. Reducing benefits payments for delayed retirement up to age 70

Individuals who work beyond their full retirement age will receive an increase in their benefits calculated by the SSA up to age 70.

How does the SSA calculate and process benefits?

Calculating benefits

Here’s what goes into calculating Social Security Benefits:

  • The SSA evaluates an individual’s earnings record.
  • It uses a formula called the Social Security Primary Insurance Amount (PIA).
  • The PIA calculation considers an individual’s 35-year earnings history and how much they have contributed during their working years to the social security program.

Processing benefits

Once an individual applies for benefits, the SSA assesses the applicant’s eligibility, evaluates their benefits based on their earnings record and historical data documented in Social Security payment history. Then, reviews and adjusts their payment processing based on a variety of factors, including age and initial benefit amount, income limits, income and adjustments or credits to Social Security payments.

What are some common myths or misconceptions about social security?

1. Social Security will run out of funding

As per the latest report from the Social Security Administration, the national Social Security trust fund will be depleted by the year 2034. When this happens, Social Security funding will be limited to payroll taxes collected by the SSA. This will not necessarily mean the program will go out of funding. 70% still ensures the continuity of nearly all Social Security funding.

2. You can claim your benefits as soon as you turn 62

Many people believe that they can claim their benefits as soon as they reach the age of 62, but this is not necessarily true. Every year an individual delays their claim up to age 70, they will receive Delayed Retirement Credits (DRCs). These credits increase their benefit amount by at least 8% for each year they delay their benefit claim.

3. You can’t work and collect social security at the same time

This is not true either. However, while an individual can work and collect social security benefits simultaneously, their earnings may still affect the SSA program’s benefits calculations. Earning above a specified number reduces the individual’s benefits payment.

4. You won’t have to pay taxes on your social security benefits

This is a common misconception. Those who have earned more than $25,000 as a single filer or more than $32,000 as a joint filer may have to pay taxes of up to 85% of their social security benefits based on their total income-taxable and tax-exempt interest during tax season.

What benefits will you receive from social security?

1. Retirement benefits

Individuals who work and contribute to Social Security for at least 10 years will be eligible to receive retirement benefits for the rest of their lives.

2. Disability benefits

In case of disability either before or at full retirement age, one can receive Social Security Disability Insurance (SSDI) benefits. The benefits will last as long as the disability persists or until the individual reaches full retirement age, that is, 66+ years old.

3. Survivor benefits

The surviving spouse or children of an individual who had contributed to Social Security for at least 10 years or passed while receiving social security benefits are entitled to receive survivor benefits.

Final Thoughts

The social security system plays a crucial role in securing the retirement of senior Americans or people with disabilities. The institution provides essential benefits that cover almost everyone’s lifesaving cost. Through proper planning and understanding of the program, Americans can maximize their benefits and plan for a stress-free retirement that covers their necessities and regular expenses.


  1. https://www.ssa.gov/Benefits/retirement/
  2. https://www.brookings.edu/blog/fixgov/2018/05/10/five-myths-about-social-security-and-what-the-programs-actually-do/
  3. https://www.aarp.org/retirement/social-security/info-2018/social-security-faq.html
  4. https://www.ssa.gov/oact/trsum/


Here are some frequently asked questions on social security:

  • Q1. What is Social Security?

    A: Social Security is a government-funded program that provides financial assistance to retired individuals, people with disabilities, and surviving family members of deceased individuals.
  • Q2. How is Social Security funded?

    A: Social Security is primarily funded through payroll taxes paid by employees and their employers.
  • Q3. When can I start collecting Social Security?

    A: You can start collecting Social Security at age 62, but your monthly benefit amount will be lower than if you wait until you reach full retirement age (which is between 66 and 67, depending on the year you were born). You can also delay collecting Social Security until age 70, which will increase your monthly benefit amount.
  • Q4. How is my Social Security benefit amount calculated?

    A: Your Social Security benefit amount is calculated based on your earnings history, the age at which you start collecting benefits, and your lifetime earnings.
  • Q5. Can I collect Social Security and work at the same time?

    A: Yes, you can collect Social Security and work at the same time, but your monthly benefit amount may be reduced if you earn more than a certain amount ($18,240 in 2020).

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